Leasehold investors labelled ‘socially irresponsible’ as MPs gear up to get reform on the Government’s agenda

By Marc Shoffman

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Tory MP Sir Peter Bottomley has labelled investors in freeholds as “socially irresponsible” as he issued a warning that Parliament would turn its focus on them.

Speaking at the first meeting of the All Party Parliamentary Group on leasehold reform under the new Parliament, co-chairman Bottomley called on investors to put things right.

He said: “The people who have bought these freeholds from developers are in my view going to face significant parliamentary attention to ask how they could buy a freehold for £5,000 and a year or two later charge buyers increased terms to buy it back.

“It is unfair, social irresponsible and wrong.”

Speaking at the meeting, a representative from the Department for Communities and Local Government told MPs Brexit legislation was a more urgent priority but any work on leasehold reform would be as stated in the Housing White Paper and Queen’s Speech, which referred to improving transparency and fairness for leaseholders.

Bottomley responded that he would propose another debate in the chamber to ask the Government how proposals would be taken forward.

The meeting also heard from a representative from Jennifer Bourne of the Council of Mortgage Lenders (CML), now part of UK Finance, who warned that banks were conscious of the effect of onerous ground rent and leasehold terms that could hit home lending in the future.

A representative from Nationwide, Robert Stevens, urged other lenders to follow the building society’s lead by imposing minimum acceptable lease terms on first-time new build transactions of 125 years for flats and 250 years for houses. The lender also will only lend on new builds where the maximum acceptable starting ground rent is limited to 0.1%  of the property’s value.


The changes, announced in May, are limited to new applications on new build transactions and will not apply to properties being sold second hand.

http://www.propertyindustryeye.com/leasehold-investors-labelled-socially-irresponsible-as-mps-gear-up-to-get-reform-on-the-governments-agenda/

Tax rises targeting landlords end up hurting tenants, says ex-BoE policymaker

By Marc Da Silva

The government’s decision to increase taxes for landlords over the past 18 months or so have been described as ‘profoundly wrongheaded’ because they will push up costs for tenants, according to ex-Bank of England policymaker, David Miles.

The government has attempted to create what the former chancellor George Osborne described as a “level playing field” between landlords and those buying homes to live in, by increasing taxes for landlords such as hiking duty costs, cutting mortgage interest relief, scrapping the ‘wear and tear’ allowance, among other measures. But Miles points out that this has left many landlords with little alternative but to pass costs onto tenants by pushing up rents.

The economist, who is now a professor of financial economics at Imperial College London, fears that fewer people will be willing to invest in the buy-to-let sector as a consequence of the tax changes, which will have a negative impact on housing supply in the PRS.

“I think these measures were introduced in order to try to help make housing more affordable for people who want to buy them, I think they are almost certainly wrongheaded,” said Miles at an event hosted by New City Agenda.

“I suspect that they will have a negative impact on the ability of young people to become homeowners, because those people are in the rented sector already.


“Making rental property more expensive, as is very likely if you reduce the attractiveness to suppliers of rented property, if a side effect of that is to make rents even higher, it is very hard to see that as helping the people who you are trying to help become homeowners.”

https://www.landlordtoday.co.uk/breaking-news/2017/7/tax-rises-targeting-landlords-end-up-hurting-tenants-says-ex-boe-policymaker

BTL index: Nothing to choose between Tory and Labour-voting regions

By Conor Shilling

The top ten buy-to-let postcodes in England and Wales are evenly split between locations that voted for the Conservatives or Labour.

Luton has been identified as the best buy-to-let investment location across England and Wales, with an average yield of 4.54% and rental price growth of 7.37%.

According to LendInvest, which analyses data from Zoopla and the Land Registry to compile its Buy-to-Let Index, Stevenage is the best performing buy-to-let postcode out of areas that voted Conservative last week.

The Hertfordshire town has recorded capital gains of 11.64% and rental price growth of 7.5% over the last quarter.

Luton is the top performing Labour-voting postcode.

According to the report, there is a clear correlation between Conservative-voting regions having high capital gains and regions with the highest rental yields voting Labour.

LendInvest's quarterly Buy-to-Let Index is calculated by analysing a combination of four critical metrics: capital value growth, transaction volumes, and rental price growth.

Romford, which has topped the ranking in previous editions, has fallen to tenth thanks to falling rental yields and capital gains.


Manchester, meanwhile, has broken into the top ten for the first time due to impressive rental price growth.

“Against a backdrop of all the political upheaval the country has endured in the last quarter, it isn’t surprising to see some significant changes in the performance of postcodes against one another," says Christian Faes, co-founder and chief executive of LendInvest.

“These shifts, however, are more isolated than systemic and the fact that there has not been a greater shakeup in the Top 10 buy-to-let postcodes signals the durability and resilience of the UK property market.”

The full data tables for the Buy-to-Let Index are below:

https://www.lettingagenttoday.co.uk/breaking-news/2017/6/btl-index-nothing-to-choose-between-tory-and-labour-voting-regions

NLA surveying landlords to 'inform future policy decisions'

By Conor Shilling

The National Landlords Association (NLA) has launched its Quarter Two Landlords Survey.

The research study has been launched hot on the heels of last week's General Election and the association says it is hoping the results will help inform future policy decisions.

"[We want] to make sure that we are armed with up to the minute views, experience and opinions of real working landlords ahead of meeting new ministers in Westminster," says the NLA.


Due to political uncertainty and increasing regulation in the rental sector, the NLA says it is has never been more important the needs of private landlords are fully represented.

The survey, which covers the second quarter of 2017, takes around ten minutes to complete, and the NLA says all responses are treated in the utmost confidence.

All participants will be entered into a prize draw to win a Fortnum & Mason hamper worth £150.

https://www.lettingagenttoday.co.uk/breaking-news/2017/6/nla-surveying-landlords-to-inform-future-policy-decisions